Subcommittee on Housing and Transportation

Hearing on S.2733 - The Affordable Housing for Seniors Act

2:00 p.m., Tuesday, July 18, 2000 - Dirksen 538

Mr. Chairman and members of the Subcommittee, my name is Michelle Norris. I
currently serve as Chief Operating Officer of the Housing Division of National Church
Residences of Columbus, Ohio, a nonprofit organization that owns or operates 186 senior
citizen and family- based communities in the United States and Puerto Rico. These
include Section 8 elderly, Section 202 and Section 811 developments, 14 of which are in
Pennsylvania and two are in Maryland. I am here on behalf of the National Affordable
Housing Management Association -- NAHMA -- a trade association representing owners
and managers of privately owned and assisted housing developments nationwide. I also
serve as chair of NAHMA's Seniors and Special Needs Housing Committee.

NAHMA congratulates you, Senator Santorum, and Senators Sarbanes and Kerry
for your introduction of S. 2733, the Affordable Housing for Seniors and Families Act.
We believe that this legislation and the House counterpart, H.R 202, if enacted, will go a
long way toward not only preserving the stock of assisted housing that serves special
needs populations, but also increasing the supply and ensuring that the elderly and
disabled receive the services necessary to continue living independently. Your legislation
also provides needed financial incentives to encourage state and local governments to
dedicate their own resources for affordable housing preservation activities, a goal
NAHMA wholeheartedly supports.

There is a pressing need for this legislation. The nation's population is aging
rapidly. According to Bureau of Census figures, between 1980 and 1997 the overall
population increased by 18 percent, but the number if persons 65 and older grew almost
twice as the overall population. By the year 2030, the number of Americans 65 and older
will reach 70 million, compared with 40 million today.

In addition, life expectancy is increasing. Between 1980 and 1997, the number of
seniors between 65 and 74 grew by more than 50 percent, and the implications for our
nation's housing policy of a growing population of frail elderly individuals needing
additional services are significant.

In this 17-year period, the number of individuals over the age of 85 increased by
73 percent. Today over 85'srepresent about 4 million elderly households, or 12 percent
of the entire elderly population. Those of us who have been managing elderly housing
since the middle 1970's have noticed the trend for our populations to "age in place" and
while they were largely men and women in their mid to late 60's twenty years ago, we
now have populations dominated by men and women in their early 80's who need
additional services and support. The costs to support these folks in one of our properties
are half to a third of the cost of nursing home care, which is the only available option in
many cases now. S. 2733 will in the end actually save the government money by
allowing residents to remain in our housing who might otherwise have to be placed in
intermediate care nursing facilities at much greater cost.

Even now, the housing needs of elderly Americans already significantly exceed
our capacity to meet them. Today, elderly and disabled households represent more than
one-fourth of all households with worst case housing needs. For every person living in
an assisted elderly housing unit, eight people are on the waiting list. While we seldom say
so for obvious reasons, there is a strong possibility that someone applying foradmission
to one of our properties today will be deceased before they reach the top of the waiting
list.

As the elderly population continues to grow, so too will the needs of the elderly
and the disabled for housing that meets their specific situations. We face the pressing
need to upgrade and improve and increase the supply of affordable housing for these
sectors of our society.

S. 2733 takes important steps in the right direction. It would make the Section
202 and 811 programs, already great successes, even better able to meet the needs of the
populations they are intended to serve. Your bill would create a matching grant program
in both Section 202 and Section 811 that will enable sponsors to leverage additional
funding sources for construction, and it allows Section 202 sponsors to acquire new
properties. It makes it easier for Federal funds for elderly and disabled housing to be
combined with other sources of private funding. It permits sponsors to form limited
partnerships with for-profit entities, which will enable them to compete for Low Income
Housing Tax Credit dollars. These provisions will allow NAHMA members to create
more elderly and disabled housing to fill the great need. The bill will also enable us to
utilize our project reserves to retrofit or modernize obsolete or otherwise nonviable units.

Senator Santorum, you have talked about providing a "continuum of care" for the
elderly and disabled persons to continue living independently. Your bill stresses the need
for a strong network of supportive services. Importantly, your bill will create a program
of competitive grants for the conversion of elderly housing to assisted living facilities.
This provision is especially critical, given the demographic changes occurring in the
elderly population. We are particularly pleased that you have included language
requiring that applicants for these grants demonstrate their commitment to providing
needed resident services in assisted living developments.

In addition, NAHMA supports the provision in S. 2733 that creates a matching
grant program, proposed initially by Senators Kerry and Jeffords, for affordable housing
preservation. For a multitude of reasons, the supply of rental housing affordable to low-income households has been declining in recent years. Congress included a number of
critical preservation-oriented reforms in the FY2000 VA-HUD appropriation bill. This
matching grant program for states and localities that devote their own resources to
affordable housing preservation can be another tool for ensuring that we do not lose
additional units of affordable housing. Mr. Chairman, NAHMA is also interested in
working with this Committee to determine the most appropriate methods for not only
preserving existing housing but also increasing the supply of affordable rental housing
units.

I want to touch briefly on two principles that should be incorporated in any
legislation seeking to improve the delivery of housing services to special needs
populations. I believe both principles are addressed in this bill.

First, moving to supportive services in all assisted housing with special needs
residents is crucial. Service coordinators are essential to these communities. We need to
be assured of funds to cover the costs, and we prefer multiyear funding, which makes
planning easier. We strongly support the provisions of the bill that encourage funding for
service coordinators, including the Section 202 financial conversion, prepayment and
refinancing provisions. We support the authorized level of funding for service
coordinators, and we strongly encourage that the bill provide for the renewal of expiring
service coordinator grants, in order to ensure some predictability in the planning process.

Second, flexibility in how we provide supportive services is critical. In the two
Section 811 properties we operate, for example, the needs of our residents vary greatly.
For instance, in my property that focuses on paraplegics and quadriplegics, our
assistance, transportation and physical therapist needs are very different than in elderly
properties.

In Section 811 developments, we believe it is particularly important that sponsors
have broad discretion to re-sort the mix of services to accommodate changes in the client
base. This flexibility to determine what mix of services are to be offered and how they
should be coordinated has frequently been missing in the administration of the current
program, and should be incorporated in this legislation.

I would like to mention briefly on one other issue. NAHMA supports the
provision that limits the set-aside for tenant-based assistance under the Section 811
program to 25 percent of the program's appropriation, and we would even encourage you
to consider a lower percentage. As the House Appropriations Committee report on the
FY2001 VA-HUD bill noted: "For many years, the Section 811 program has played a
critical role in housing 'production.' The program has added to the stock of affordable
and accessible housing and has been proven to be one of HUD's most effective programs,
successfully investing federal funding through nonprofit disability organizations." We
agree that while tenant-based rental assistance is but one component of a successful
housing assistance policy, it is not an effective and broad-based policy that best fits the
needs of persons with disabilities. We believe that in this case, project basing permits a
housing community to think in the longer term, and this is essential for planning the mix
of services that best meets the needs of our residents.

In conclusion, NAHMA strongly supports this excellent bipartisan effort to
improve and update two of our most successful and important Federal housing programs. We believe that this bill represents a significant step forward in housing policy
and a serious commitment to meeting to meeting the growing housing needs of low-income elderly and disabled citizens.

We must also stress that this is only a start; the unserved need is still there. We
are mindful of the serious budgetary limitations that affect spending for housing
programs. However, we believe that meeting the future housing needs of these special
needs populations will require a long-term commitment by the Federal government and
its private sector partners. Based on the data that is currently available, those needs are
only expected to increase and place greater stress on our housing resources.

NAHMA appreciates the commitment that this bill makes to lower income elderly
and disabled individuals and families. We look forward to working with you, Mr.
Chairman, and this subcommittee to achieve enactment of S. 2733.